EI, in plain English.

EI is an income-replacement program funded by premiums on insurable employment. Employers normally contribute 1.4 times the employee premium, but approved premium-reduction arrangements can change the employer rate. CRA collects the premiums. Service Canada decides and pays benefits.

What EI is.

Employment Insurance is a federal income-replacement program, with premiums collected by CRA and benefits administered by Service Canada. Employees pay 1.63 percent on every dollar of insurable earnings, up to the 2026 Maximum Insurable Earnings ceiling of $68,900. Once that threshold is crossed, deductions stop for the rest of the calendar year.

Quebec runs a different number: 1.30 percent, not 1.63. The reason is the Quebec Parental Insurance Plan, QPIP, which absorbs parental-benefit coverage that EI carries in every other province. Employees in Quebec pay into both programs, but at a reduced EI rate to avoid duplicating the same coverage.

Employers do not match dollar for dollar. The standard employer share is 1.4 times the employee deduction, collected on every pay run.

What the numbers produce.

Take an Ontario employee earning $72,000 in 2026. Only $68,900 of that is insurable. Their EI premium for the year: $68,900 times 1.63 percent equals $1,123.07. The employer's share: $1,123.07 times 1.4 equals $1,572.30. Together, $2,695.37 flows to the CRA from a single employee relationship before that person makes one claim.

For a Quebec employee at the same salary: $68,900 times 1.30 percent equals $895.70 in EI premiums. The employer still pays 1.4 times that, or $1,253.98.

That $227.37-per-employee gap between provinces compounds in a multi-province payroll.

How EI is remitted.

EI premiums are remitted to the CRA through the payroll account using the applicable payment method or voucher.

The obligation that payroll teams most often underestimate: the Record of Employment. A ROE is required any time an employee has an interruption of earnings, whether that is a layoff, a leave of absence, or the end of a contract. A late or inaccurate ROE delays the employee's EI claim and invites CRA scrutiny of your payroll records.

Errors that show up in audits.

• Using the wrong provincial rate. Quebec employees coded as Ontario employees pay 33 extra basis points on every dollar of insurable earnings. In a payroll of 200 Quebec staff, that error compounds across every pay run and surfaces at year end as an over-deduction that requires a correction.
• Continuing deductions past the MIE. Once insurable earnings cross $68,900, EI deductions must stop. Systems that do not track cumulative insurable earnings by employee will over-deduct and require a refund at year end.
• Misapplying the employer multiplier. The 1.4 factor applies to the employee's actual deduction for each period, not a projected annual figure. Use the employer’s approved rate where the EI premium reduction program applies.
• Issuing the ROE late or with errors in the interruption detail. The ROE captures the reason for the interruption and the last day for which the employee was paid. Errors in either field delay the employee's EI claim and can trigger a compliance review.

How Workzoom runs it.

Workzoom calculates EI premiums on every pay run, applying 1.63 percent across provinces outside Quebec and 1.30 percent inside Quebec, tracking cumulative insurable earnings against the $68,900 MIE ceiling and stopping deductions automatically when the cap is reached. The 1.4 employer multiplier is calculated at the payroll engine level. Workzoom generates the PD7A for the employer to submit and remit to the CRA.

County of Renfrew, an Ontario municipality, and Silvera for Seniors run Canadian payroll on Workzoom. Because Workzoom operates on one database, the province of employment, the leave dates, and the payroll calculation share a single employee record. No export between systems. No reconciliation step. Workzoom has run Canadian payroll since 2001, family-owned from the start.